Last updated: September 14th, 2021 5:44 PM

Advantages and Disadvantages of eWay bill

Deferment and extension were perhaps the most common terms discussed during the process of GST implementation. After a lot of deferment, one of the most critical components of this tax revolution was the implementation of the e-way bill system. It was introduced on 1st April 2018 and states were allowed to choose any date up to 3rd June.2018 for implementation.  The e-way bill is as the acronym suggests, stands for electronic waybill. The GST e-way bill is generated online through the GST system for inter-state or intra-state movement of goods with a value of more than Rs. 50000. The e-way bill should be generated before the shipment of goods and should include details of the goods being carried, the consignor, its recipient, or the transporter.   The person in charge of the vehicle shall carry the tax invoice, delivery challan or bill of supply, bill of entry, as the case may be, and the e-way bill or just the number generated from the portal. Once generated, the details of the e-way bill cannot be altered or rectified. It can, however, be canceled within 24 hours from generation.

Objectives of implementation

The objectives for implementation of e-way bill way to eliminate the need for multiple transits pass for the movement of goods within each state. The intention was to shift the system from being departmental policing to self-declaration model. The finance ministry was also anxious and excited about the implementation because revenue tax collection and tax evasion were huge problems back then. With the implementation of the e-way bill, the government was anticipating a significant rise in revenue from GST.  The system came in with its fair share of pros and cons. For some, it made life easier while for others it was a complex unnecessary procedure.

Advantages of e-way bill and its implementation:

• Less Documentation: A whole lot of state-wise documentation would not be required for goods movement ever again. Another benefit available for transporters is the RGID device in the vehicle carrying consignments on a regular premise. The person responsible for the vehicle does not need to carry physical copies of the e-way bill as the same can now be mapped and verified through the RGIC device installed in the vehicle. It helped in doing away with the hassles of carrying and safe-keeping the physical papers.

• Cost Reduction: Electronic way bill reduces logistics cost by reinforcing proper invoicing and reducing tax avoidance. Also, subsequently, the proportion of logistics cost to GDP is expected to come down, which is currently pretty high when put against other countries.

• Fast and Efficient Transportation: The introduction of e-way bill has made the whole transportation system faster and much more efficient. It reduced the “n” number of check posts crosswise over state borders and national highways. It narrowed down the gap between 85000 annual average km travelled by Indian trucks and 150000 to 250000kms in developed countries.  

• Simple and quick generation of e-way bill: The generation of e-way bill happens through the government set online portal. The portal and e-way bill system are, however, very simple and user friendly. With the system it possible for dealers to self-generate e-way bills and it is considered no big task these days. In the days to come, the process is expected to get simpler so that even laymen can generate an e-way bill and facilitate the movement of goods.

  E-way bill: Important points and Documents

Disadvantages of e-way bill

Despite these perks, the introduction of the electronic waybill brought along some challenges and problems with it. Primarily the logistics industry faced these bottlenecks and struggled to adapt and adjust to the new procedures. The government, however, is constantly changing the procedures, rules and laws to make things simpler and adaptable for the dealers and transporters. 

• Challenges around the extension of the waybill: The extension of the bill creates multiple waybill numbers against a single dispatch or one single invoice. This could create duplication. Moreover, the time span for the extension, 4 hours before and after the expiry of validity is also seemingly short.  
• Compliance challenges for multiple daily movements: Businesses with multiple movements of goods daily poses a fresh set of compliance challenges. The businesses need a specific software solution to be able to generate the electronic waybill on a time basis. The software should also enable reconciliation of turnover with e-way bills.
• Internet-based system: The electronic waybill system is an end to end the internet-based system. For locations and areas where there is poor internet availability, generation of the e-way bill becomes a struggle. Moreover, transporters and dealers face problems in dispatching goods because of unfamiliarity with the internet and technology.
• Technical glitch: Though the e-way bill portal has a daily proposed capacity of generating 75 lakhs waybills, businesses are anxious that as more and more states are being brought under the purview of the intra-state e-way bill, the system will not have much downtime. The technical glitches in generating waybill electronically are quite a challenge for the logistics industry. The government had to defer the implementation of e-way bill multiple times because of technical issues. But since they are unavoidable, even now these technical glitches cause delay and inconveniences.

Conclusion

One thing that the introduction of e-way bill has seamlessly achieved is the dilution of inter-state boundaries. The quantum of time spread at state borders for verification and of documents was a hindrance to all businesses. It often discouraged them to move beyond their home state. But, with the new system, things have taken a turn. Moreover, the government has been trying incessantly to put in place a system that works flawlessly. A system that does not disrupt the operations of the logistics industry. Despite these tireless efforts, there are wrinkles in the system that need to ironed for perfection. The government is expecting to achieve this gradually over time.